Beer flow dries up in Orissa

Bhubaneswar: The pub has no beer! Beer cases have vanished from the market after the manufacturing and supply companies have refused to sign renewal MoUs with the Odisha State Beverage Corporation. So the beer barrels have run dry. So you have the sun but no chilled beer on the beaches….

The companies protested against the Orissa (Odisha) government’s decision to pay 20 percent less for beer and 10 per cent less for India made foreign liquor (IMFL). The companies decide on the “offer price” after consulting the government on supply of liquor and beer.

The corporation supplies beer and liquor to all the traders. As it is, the price of the IMFL has shot up by Rs 10 to Rs 40. The price varies from one product to another. Once the offer price is decided, other prices, including the excise duty and the profit margin of the corporation, are added. The corporation decides on the maximum retail price (MRP) of beer and the liquor brands in Orissa.

The traders say the companies supplied a case of beer (12 bottles; one bottle contains 650ml) to the corporation for Rs 500, and the state government charges another Rs 500 on it as excise duty and other taxes. “The trader has a margin of Rs 140. Therefore a case of beer which cost Rs 500 initially is sold at around Rs 1,140 and customer a bottle for Rs 95.”

Now the state government was asking the companies to supply beer to the corporation at Rs 400 a case instead of Rs 500. So they have backed out. “The state government wants a share of Rs 600 instead of Rs 500 for one case of beer,” a trader said. The state government, which had earned Rs 2,000 crore as excise revenue last year, aims to earn Rs 2,500 crore this year through the new formula.

So there was no supply of beer. “A shortage has erupted, and it will become more acute after three days,” said another liquor trader.

Managing director of the corporation D. Kar said nine companies supplied beer and 27 companies provided the IMFL to the state. Out of the nine companies, three companies – United Breweries Group, SAB Miller India and Carlsberg group – cater to more than 80 per cent beer requirement of the state. Sources said these companies were yet to turn up to renew the MoU for supplying beer protesting against the government’s “arbitrary decision”.

Excise commissioner P.K. Senapati says that the state government decided to reduce the offer price after making a detailed study of supply rates by the companies in states such as Andhra Pradesh, Bihar, Jharkhand and Telangana. We cannot allow the companies to dictate us.”

Excise minister Damodar Rout said: “A committee has been formed to examine the issue. After it submits the report, we will take a final decision.”

On the issue of rising price of the beer and liquor, an excise official said the price had gone up as the government had enhanced its excise duty by Rs 30 on the bulk supply of a litre of beer and Rs 250 on bulk supply of the IMFL.